Around £10 billion in support to help combat rising energy bills looks set to be unveiled by Boris Johnson's government. Previously calls for Chancellor Rishi Sunak to announce an emergency budget to tackle increasing living costs had been rebuffed.
But a new report from the BBC suggests schemes such as the Warm Homes Discount could be extended by Mr Sunak. It comes just days after Ofgem revealed energy bills are set to increase even further later this year.
One-off payments for some of the most vulnerable homes and a cut in VAT on fuel could also be announced. The support package is expected to be funded in part by a windfall tax on oil and gas firms which could raise £7bn.
The government has come under increased scrutiny with living costs continually hitting families in the pocket. But the BBC understands some senior Cabinet members have resisted taxing big energy firms in case they reduce the amounts they invest into the UK.
The broadcaster says the package of support will come after Boris Johnson was dealt a hammer blow in the form of the Sue Gray report. The Prime Minister is said to be keen to move on and deliver what he says are "people's priorities".
The Warm Homes Discount scheme, one incentive that could expand, currently offers low-income families a £150 one-off discount between October and March. But Mr Sunak announced, back in February, that it would be extended to even more families until March 2026, meaning millions more would be eligible.
This would be on top of the £200 reduction in energy bills that has already been announced in the form of a re-payable 'rebate', with costs spread over the next five years. The money comes as the typical energy bill has risen by an average of £700 in April, with an £800 spike expected in October.
The 'windfall tax' on energy companies had been backed by the Labour Party. But some ministers, including Business Secretary Kwasi Kwarteng, had opposed the idea.
The tax is designed to raise money from firms that have benefitted from something they have not necessarily been responsible for. And it is set to be announced as Shell and BP made record profits because gas and oil prices rocketed, most recently due to Russia's invasion of Ukraine.
James Spencer, managing director of fuel consultancy Portland Analytics, has however warned energy companies did not think they were 'unfairly profiteering'. "In the pandemic, the likes of Shell and BP lost about £5bn...in 2020," he told the BBC's Today programme.
"They didn't go to the bank with a cap in hand saying please bail us out, like the banks normally do. In 2022 I think both BP and Shell have written off up to £10bn possibly each in Russia."
Proposals to tax income from other electricity producers such as some older windfarms and nuclear plants which have also seen windfall gains have been shelved.
